Why a Saturday mindset is bad for retirees

By Matthew Heimer

Your working life is like a long string of weekdays; your retirement is like a long string of weekends. And that’s a major reason why so many savers underestimate how much they’ll actually spend when they retire, according to one financial adviser.

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If it’s Saturday, slice up the credit cards.

This metaphorically persuasive (if unscientific) explanation appeared this week in a piece by Corrie Driebusch in The Wall Street Journal in which financial pros discussed how they grapple with their clients’ sometimes unrealistic expectations. Driebusch describes her conversation with Jonathan Murray, a financial adviser with UBS Wealth Management Americas in suburban Baltimore, Md.:

“Many soon-to-be retirees assume that because they’re no longer commuting and purchasing clothes to wear at the office, they will spend less. But this is often not the case…To drive this point home, [Murray will] ask clients on what day of the week they spend the most money. The answer, he says, is nearly always the same: Saturday. In retirement, he tells clients, every day can be a Saturday.”

It makes sense on one level. Sure, during your working life, Saturday is the day you spend big on essentials like the weekly groceries and getting the lawnmower repaired, but it’s also the day you and the spouse might treat yourselves to a ballgame or a big night out. And as Encore contributor Glenn Ruffenach noted in a recent post, that kind of spending can add up quickly for retirees, even if they aren’t attacking the high-priced items on their bucket list.

The bottom line: What you’ll spend in retirement is a tough-to-predict figure, and you’ll need to consider it in detail—and probably, more than once—as retirement draws nearer.

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About Encore

Encore looks at the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities, needs and priorities of people saving for and living in retirement. Our lead blogger is editor Matthew Heimer, and frequent contributors include editor Amy Hoak, writer Catey Hill, and MarketWatch columnists Elizabeth O’Brien, Robert Powell and Andrea Coombes. Encore also features regular commentary from The Wall Street Journal retirement columnists Glenn Ruffenach and Anne Tergesen and the Director of the Center for Retirement Research at Boston College, Alicia H. Munnell.